After Industrial revolution, the Financial technology (Fintech) industry has been the most impacting development. The past 100 years have witnessed technology growing at a galloping rate, much to the delight and convenience of mankind. The finance industry, in particular, has utilized technology to offer myriad services, bidding adieu to the long-established procedure of financial transactions. From education and entertainment to e-commerce and finance, technology has transformed the entire landscape. The demonetization move by the government threw the country into a tizzy. It probably came at the right time, propelling the country further towards a cashless economy. FinTech start-ups reported a 10x increase in use, with many of them expanding their business to tier II and tier III cities.
Paradigm Shift In Money Transaction
For eons now, Indian economy has known to be cash-driven. Globalization and technology have broken through the shackles to usher in digital transactions. The e-commerce boom, the payment wallets, the numerous services, including insurance, and the wide-range offerings have seen a massive move from the traditional exchange of cash to e-transactions. The FinTech sector, valued at $ 33 billion in 2016, is expected to scale up to $ 73 billion by 2020.
Tier II-III Cities Joining The Online Traffic
The fact that currently only 50 million organizations, who have made the big offline to online switch, are proof enough of the monstrous challenges ahead like rigid mindsets, illiteracy and the inability to afford good smart phones. Though the road ahead appears arduous, immense support from the government at the Centre and the initiatives of key regulatory bodies to foster a totally cashless digital economy have evoked a huge response even from smaller cities and towns.
Government Facilitating The Growth
Noteworthy efforts like the establishment of smart cities, RBI officiating the Unified Payment Interface with National Payments Corporation of India (NCPI) and a multitude of start-ups and entrepreneurs are some of the key contributors towards the growth of a successful FinTech environment.
Fintech Offers Ease Of Operation
Making payments has undergone a massive transformation offering customers an unbelievable, seamless and secure experience. Ease of transactions at one’s convenience and comfort has offered the common man freedom of time and place, allowing each one to avail the complementing offerings as well.
Fintech Is Constantly Innovating To Get Customer-Friendly
The fintech industry has lent a new perspective to the system of financial transactions in India and it continues to innovate with new themes like next-generation payments, financial inclusion and P2P lending, to name a few. Enhancement of international payments systems and digital identity is an area where the technology offering is being adopted. Digital identity technology has already been adopted by major banks while development of international payment systems is in the offing.
With Transparency In Operation Fintech Will Witness Boom
While the Fintech industry has thoroughly established its right to existence, the biggest challenge ahead for it will be to prove its indispensability to society and showcase complete transparency. An equal amount of support from the central authorities like the government incentives, a feasible business environment and regulatory mandates will catalyze the fintech industry to overcome existing hurdles. Meaningful collaborations, an absolute digital infrastructure and an equitable support clubbed with lucrative incentives to start-ups will help the fintech industry strengthen its foothold speedily.